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Halicki Films, LLC v. Sanderson Sales and Marketing

IP/Entertainment Case Law Updates November 19, 2008

In 1974, plaintiff Halicki’s husband “directed, produced, acted in, and marketed the original motion picture Gone in 60 Seconds” (the “Original GSS”). The Original GSS featured a yellow 1971 Fastback Ford Mustang, referred to in the film as “Eleanor” (“Original Eleanor”). After her husband’s death, plaintiff Halicki obtained ownership of the Original Eleanor, as well as “all right, title and interest, including copyrights” of the Original GSS. Plaintiffs continued to market both the Original Eleanor, at auto shows, and the Original GSS, through VHS and DVD releases and merchandising.

In 2000, Hollywood Pictures/Walt Disney Company (“Disney”) released a remake of Gone in 60 Seconds (the “Remake GSS”), featuring a 1967 Shelby GT-500 Ford Mustang as “Eleanor” (the “Remake Eleanor”). Disney had acquired the rights to produce a remake of the film through a 1995 licensing agreement with plaintiffs. Soon after the release of the Remake GSS, defendant Shelby, who had registered “GT-500” and “Eleanor” as trademarks for automobiles and structural parts of automobiles, entered a licensing agreement with defendant Unique Motorcars, Inc. Unique then began manufacturing and selling vehicles resembling the Remake Eleanor. Prior to, and during the pendency of, the ensuing litigation, plaintiffs received registration for Gone in 60 Seconds and “Eleanor” marks for various purposes.

In 2004, plaintiffs asserted their rights to Gone in 60 Seconds and “Eleanor,” filing suit against defendants in the Central District of California for, inter alia, copyright infringement and common law trademark infringement. In 2005, the district court granted summary judgment in favor of defendants based on the finding that plaintiffs lacked standing. Here, the Ninth Circuit vacated the judgment and remanded the case, finding standing as to all of plaintiffs’ copyright, trademark, and unfair competition claims, as well as their claim for declaratory relief.

The district court based its finding of lack of standing as to plaintiffs’ copyright infringement claims on its conclusion that plaintiffs had given away all rights with respect to the Remake Eleanor in their agreement with Disney. Finding the plain language of the agreement ambiguous, the Ninth Circuit held that the district court erred because it did not appear to have examined all available extrinsic evidence to determine whether the agreement was “reasonably susceptible to the interpretation” urged by plaintiffs. Specifically, the district court did not mention an Acknowledgement and Agreement, signed by Disney, which confirmed plaintiffs’ interpretation that plaintiffs “retained the merchandising rights to that certain car called ‘Eleanor’ as such car appears in the Remake” or plaintiff Halicki’s own declaration. Having found that, based on all of the extrinsic evidence, the contract was reasonably susceptible to the interpretation that plaintiffs retained rights to the car as portrayed in the remake, the court went on to conclude that this was the actual meaning of the agreement. As such, plaintiffs retained their rights as to the Remake Eleanor and have standing for their copyright claims. Finding the question of whether Eleanor qualified for copyright protection a fact-intensive issue, the circuit court remanded the issue and noted that the district court implied in its decision that Eleanor was protected and its own conclusion that Eleanor “displays consistent widely identifiable traits” and is “especially distinctive.”

Turning to the trademark infringement claim, the court reversed the district court’s determination that plaintiffs lacked standing to sue for common law infringement of the “Eleanor” trademark. The court held that the district court applied an incomplete standing analysis. The district court found that plaintiffs lacked standing as to the “Eleanor” mark because plaintiffs failed to offer evidence that they were “the registered owner[s] of the mark.” The Ninth Circuit stated that this conclusion was flawed because plaintiffs were asserting rights as owners of an unregistered trademark. Therefore, plaintiffs’ claim of ownership is based on “prior use” and “a cognizable commercial interest in the mark.” The court found reversible error in the district court’s failure to evaluate plaintiffs’ prior use arguments.

As to lack of standing for infringement of the Gone in 60 Seconds mark, the court stated that the district court “confuse[d] an analysis of the merits of [plaintiffs’] infringement claim with an analysis of whether [they have] standing to bring those claims.” The district court found plaintiffs lacked standing, because of a lack of direct competition between plaintiffs’ and defendants’ uses of the mark. Specifically, plaintiffs registered the Gone in 60 Seconds mark for “toy model cars, toy model car kits, and baseball caps,” whereas defendants only manufacture and sell actual cars. Reversing, the court stated that “[t]o establish standing under the Lanham Act, a plaintiff need only demonstrate that she is a registered owner of a mark for any class of products, even one that does not compete directly with the defendant’s products.” The court similarly concluded that the district court erred in finding that plaintiffs did not have standing to seek declaratory relief or a state law unfair competition claim.

Finally, finding that none of plaintiffs’ claims are frivolous or unreasonable, the court affirmed the district court’s conclusion that defendants were not entitled to attorneys’ fees.